One of the key benefits of investing for retirement using a retirement fund is the generous tax deduction for contributions, subject to a maximum of 27.5% of the greater of your taxable income or remuneration, with an annual ceiling of R350 000.

The SA Revenue Service (Sars) attempts to limit the abuse of trusts as a means of tax evasion by individuals. Sars identifies persons and entities that are closely connected to the beneficiaries of the trust – especially where income and capital gains have been transferred to such persons and entities – since the beneficiaries are the parties who will directly benefit from all income and capital gains accrued in the trust.

2018 BUDGET SPEECH UPDATE. The Minister of Finance announced amendments to tax and other legislation that may affect investors. These changes come
into effect on 1 March 2018, unless otherwise indicated.

You don’t pay any tax on investment income (interest and dividends) earned in the product, or any capital gains. There are no restrictions on the funds you can invest in (other than that funds cannot charge performance fee), and no minimum investment period is required. You are also not limited on the withdrawals you can make from your investment.

Investing offshore allows you to diversify and benefit from a broader universe of investment ideas, but what about the tax you may have to pay? As with any other investment, it is important to get the full picture before you make any decisions. When you invest offshore, the tax you may be required to pay depends heavily on the way you choose to invest.